Real stats, real numbers: 2008 market wrapup
December 29th, 2008 Filed Under Financial District, Mission Bay, North Beach/ Waterfront, Showplace Square, South of Market, Tenant Activity
As the year grinds to an end and we look back at the recent damage that has been done to our great Country’s financial markets I thought it would be beneficial to my clients to publish some real data. We are all well aware by now of what has happened to the stock market, the unemployment rate, and of course the equity of some of our most famous corporate institutions. How all of this will have an affect on San Francisco’s commercial real estate rental rates and vacancy numbers has yet to be determined however.
What we do know is that in the most general of senses rental rates are dropping, building values are dropping, vacancy rates are increasing, sublease space is increasing, and the velocity of deals happening in the marketplace is at a minimum. The uncertainty surrounding what 2009 will bring and what affect the bailout will have on the economy has left most of us doing whatever we can to cut costs and be efficient moving forward. This mentality applies even to those companies with strong [More...]
San Francisco Police Department leases two buildings in Showplace Square
December 23rd, 2008 Filed Under Showplace Square, South of Market, Tenant Activity, Yerba Buena, Zoning & City Hall Issues
The San Francisco Police Department has completed a deal to take the entirety of two buildings in the Showplace Square submarket. 1401 16th Street and 1700 17th Street comprise roughly 77,000 56,000 square feet of combined space and occupy the whole 3/4’s of a block surrounded by 16th, 17th, Carolina, and DeHaro Streets. The 1700 building is the former Jamba Juice headquarters before they moved to the East Bay, and it has been available for lease since that time.
This lease is significant for the area and will likely change the face of an already enjoyable place to spend time. One block away is the Whole Foods Market, two blocks away is 251 Rhode Island where Live Nation has taken space recently, and several blocks North is the heart of Showplace where the State-named Streets (Vermont, Kansas, Rhode Island) meet up with the SOMA [More...]
Friday Updates: Schlage approval, Transbay video, Doyle Drive, NMTC to SOMA
December 20th, 2008 Filed Under Development Updates, Financial District, South of Market, Tenant Activity, Zoning & City Hall Issues
It has been a busy week in San Francisco. The majority of the action as usual is sitting behind the scenes, overwhelmed by the Nations coast-to-coast financial meltdown.
Below you will find links to stories that may have missed the front pages, but will certainly have an effect on how we move forward as a City over the next decade. The Doyle Drive update is of particular interest to me as it shows good signs of the City making smart progress.
NMTC Fund Launching Warehouse Conversion (Globe St.)
Transbay Transit Terminal Ground Breaking Video (Socketsite)
Office rents continue to drop (SF Tenant Representation)
Environmental report, approved for Doyle Drive (Chronicle)
Approved (Finally): Schlage Family Housing (Curbed SF)
Jeffries subleases at One Montgomery Tower, Coalesse to 660 Third
December 15th, 2008 Filed Under Financial District, South of Market, Tenant Activity
Two tenant relocations to report on today, both of which were signed this past week but the information surrounding the leases has now had a chance to be reported and vetted to be certain the details are correct.
Jeffries & Company has subleased 19,620 square feet of space from Broadpoint Securities at One Montgomery Tower, as reported by the CoStar Group. One Montgomery Tower actually has an address of 120 Kearny St, which is what Third turns into when it crosses over Market Street headed North towards Chinatown. This is an interesting lease to me because it represents one financial services firm giving sublease space to another, which is a trend in San Francisco. [More...]
Office rents continue to drop, recent leases give teeth to the decline
December 12th, 2008 Filed Under Development Updates, Financial District, Mission Bay, North Beach/ Waterfront, Showplace Square, South of Market, Tenant Activity, Yerba Buena, Zoning & City Hall Issues
The well acknowledged market slowdown in San Francisco’s financial district has finally started to show itself in the form of actual lease transactions. Predictions that rental numbers were headed South have been around for quite some time of course but now the theories have some teeth. Tenants have been pushing very hard on landlords for more concessions and lower numbers, landlords have been actively cutting rates and increasing concessions to appeal to tenants, but the truth is activity is slowed as a whole, which means there are fewer tenants to pursue.
The majority of tenants that have decisions to make have been pushing back the date in which they plan to make those real estate location decisions. That being said some tenants have a lease expiration now, and some tenants may see this as the best time to grab a lower rental rate while the opportunity exists. Wells Fargo made some very intelligent and well documented real estate space decisions following the dot com era, and their recent commitment to 55,000 square feet at 45 Fremont may once again prove to be brilliant timing. [More...]
Visa to move world headquarters to 595 Market St
December 5th, 2008 Filed Under Financial District, Tenant Activity
In what will prove to be one of the few large leases signed approaching the end of the year in San Francisco, Visa USA has chosen 595 Market Street as the future home of it’s world headquarters, taking 44,000 square feet over the top three floors.
The San Francisco Business Times reported this week that Tishman Speyer had landed the big fish after Visa had conducted a very long, and very quiet, search through competing San Francisco properties. 595 Market is a beautiful building that sits on the corner of Second Street with a walk-through lobby allowing folks a nice shortcut when coming off Market Street. The property has a hexagonal shape that allows for one side of the building to look straight down Market Street towards Twin Peaks, a great view that is made better because immediately across Market Street is One Post, and the McKesson Plaza.
What this lease means for Tishman Speyer can not be overstated. This property owner continues to make smart decisions and continues to land credit tenants. Their 555 Mission Street building (Mission Street update here) will end up LEED Certified when it is completed and they have already pre-leased 30% of that building to two major law firms [More...]
D.C. firm hires Heller Ehrman lawyers, takes 4EC sublease space
December 1st, 2008 Filed Under Financial District, Tenant Activity
A full floor sublease at 4 Embarcadero Center has been leased by a Washington D.C. law firm to make room for the Heller Ehrman lawyers they were able to hire last month. The 22nd floor, formerly occupied by Stockbridge, has been leased on a plug and play basis through the end of the original master lease term of September 2012.
There are a few interesting details to this story, which was reported by J.K. Dineen and Blanca Torres from the San Francisco Business times at the end of last week(story below). For starters, the flight to sublease spaces is a good example of what is happening in real time here in San Francisco. Sublease space is typically less expensive, and when you can get great views at a great rate with furniture and cabling included on a lease that runs out further than three years the deal makes a lot of financial sense. The 22nd floor at 4 EC for the price they were reported to have been able to snare shows either a weakening rental market, or at least the fear of a weakening rental market. [More...]
